Overseas e-tailers still riding roughshod over local outlets
The quick draw of an iPhone to take a photo is also a dead giveaway. "You can't stop them," says Mr Gordin, who has been in retailing for more than 30 years and is chief executive of Bike Force Australia, a bricks-and-mortar chain with 20 bike shops across Australia as well as an online store.
"They will take photos with their iPhone and write down things, they'll come in with a piece of paper, walk around the store, generally they will do that and then just walk out."
The scene has become commonplace around Australia's shopping strips and is a constant lament of retailers who feel they are being taken advantage of by consumers who use their stores for research but do their shopping online.
There is now some hope that tide might turn as the Australian dollar has sunk 15 per cent against the value of the US dollar since April to about US90¢ - and looking like it might fall further.
This has made goods offered online on mainly US websites more expensive against the same or similar product bought from an Australian shop or website. The relative price gap is closing and after woeful trading conditions for the past two years retailers are hoping this will bring shoppers back.
However, economists and online experts have cautioned domestic retailers that a falling dollar might not trigger a massive switch by consumers into buying local.
This is because it seems it is not only pricing that has hooked Australian consumers on surfing overseas sites for deals.
"There is no doubt that one of the key factors that gets consumers spending online internationally is the relative pricing, but it's also the great range available which is most often far broader internationally than is available in Australia," CBA retail analyst Andrew McLennan said.
"There are brands you just can't get in Australia, there are ranges you simply can't get in Australia."
NAB senior economist Gerard Burg said the increase in Australians shopping at overseas online sites from 2010 was accompanied by a rally in the dollar from US80¢ to parity. But it also was accompanied by an explosion in the proliferation of iPhones and iPads, which has helped connect consumers to the online world in greater numbers and, importantly, while actually shopping.
Recent research from Ernst & Young shows many Australians are agnostic when it comes to where they buy their goods from. Supporting local online stores is just lip service for many, with almost half the shoppers surveyed saying they did not care if a site was overseas or local and that value for money as well as fast and reliable delivery times were more important.
And it is delivery times that are becoming the real killer to local stores these days.
"A lot of these overseas online players have far better developed online capabilities," Mr McLennan said. "So you end up getting products that you purchased overseas quicker than you can get it from domestic online retailers.
That is something Mr Gordin knows all about. No matter where the dollar sits, often he can't beat delivery times from online stores in Britain that can ship faster to his own backyard than he can.
In the meantime, he has to grin and bare it as he watches customers snapping away with their iPhones. "I'm a consumer as well and I understand why they choose to buy overseas. What we need to do is try to educate them that Australia is now in the throes of being more internationally competitive."
Frequently Asked Questions about this Article…
The article notes the Australian dollar has fallen about 15% since April to roughly US$0.90, which makes goods listed on mainly US websites more expensive for Australian shoppers. That currency move has closed the relative price gap and given domestic retailers a better chance to compete on price.
Economists and online experts in the article say a falling dollar might not trigger a mass switch. They point out that pricing is only one factor—product range, delivery speed and online capability also drive shoppers to overseas sites, so many consumers may still prefer buying abroad.
According to CBA retail analyst Andrew McLennan and other sources in the piece, shoppers choose overseas sites for a broader range of brands and product lines not available in Australia, better-developed online platforms, and in many cases faster or more reliable delivery.
Bike Force Australia CEO Bill Gordin describes customers who come into stores to research and photograph prices, then purchase online. He also says that even when currency favours local buying, some overseas retailers can still beat domestic delivery times.
Delivery times are highlighted in the article as a ‘real killer’ for local stores—many overseas players have better logistics or online capabilities that let them ship products faster to Australian customers, which can outweigh price differences.
Ernst & Young research cited in the article finds many Australians are agnostic about site location: almost half of shoppers said they didn’t care if a site was overseas or local, prioritising value for money and fast, reliable delivery instead.
NAB economist Gerard Burg and others point to the proliferation of iPhones and iPads since 2010 as a major factor—these devices make it easy for consumers to compare prices, research products in store and then buy online while they shop.
The article suggests investors should monitor AUD/USD movements (which affect relative pricing), retailers’ online capabilities and delivery logistics, and consumer preferences for product range and fast shipping—each of these factors can influence how domestic retailers compete with overseas e‑tailers.
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